Real Estate And Taxes For Us Nationals

[Thaiquila]

I am considering buying a condo in Thailand in the future but am totally confused about the tax situation for a US national.

For example,

Renting out a condo -- is the income (profit after expenses) declared on a US tax form, a Thai tax form, or both, and which country takes precedence (I am assuming you wouldn't pay the tax twice)

Owning a condo you sell for a profit that was your primary residence (no residence in the US) -- would the profit be reported to Thai tax, US tax, both, etc. Also, if US would the primary residence exclusions (no tax on profits under 250K dollars) be in effect on a foreign property? Same applies to a loss, of course

[taxout]

1. Rent out your Thai condo and the rent'll be income for US Federal income tax purposes. The rules aren't simple, but you may be able to use some of any Thai income tax on the rent as a foreign tax credit for US income tax purposes, reducing your US tax liability.

2. Gain on sale of a Thai condo would be taxable in the US and you'd be entitled to the $250,000 principal-residence exclusion if you otherwise qualify. If you don't qualify or have gain over $250,000, then Thai income tax on the gain may be used as a foreign tax credit for US income tax purposes.

3. You can't claim a loss on sale of a principal residence for Federal tax purposes, whether the residence is in the US or not.